{"id":2275,"date":"2023-02-23T22:55:18","date_gmt":"2023-02-23T22:55:18","guid":{"rendered":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/?p=2275"},"modified":"2023-02-23T22:55:19","modified_gmt":"2023-02-23T22:55:19","slug":"secure-act-2-0-helping-increase-retirement-savings","status":"publish","type":"post","link":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/secure-act-2-0-helping-increase-retirement-savings\/","title":{"rendered":"SECURE Act 2.0 Helping Increase Retirement Savings"},"content":{"rendered":"
\"The<\/figure>\n

The recent passage of the SECURE Act 2.0, which was part of the massive year-end spending bill passed by Congress in December 2022, introduced new provisions that will help Americans with their retirement savings. The legislation combines three different retirement-focused bills that received bi-partisan support. One provision, in particular, raises the age from 72 to 73 for when individuals must start taking required minimum distributions (RMDs) from their retirement accounts. It went into effect as of January 1, 2023. SECURE Act 2.0 also stipulates that in 2033, the RMD age will again increase to 75.<\/p>\n

Other Key Retirement Provisions<\/h2>\n

Another provision intended to help individuals in their retirement relates to catch-up contributions for those ages 60 through 63, beginning in 2025. Qualifying individuals would be able to contribute an additional 50% of the regular catch-up contribution limit, which kicks in at age 50. For example, if the provision was in place for 2023, an individual age 62 could contribute the maximum of $22,500 to his\/her company\u2019s 401(k) plan, in addition to a catch-up contribution of $7,500, plus an additional 50% of the $7,500 catch-up contribution totaling $33,750. When the new rules take effect in 2025, that $33,750 will likely increase.<\/p>\n

As for individual retirement accounts (IRAs), the catch-up contribution limit would be indexed to inflation starting in 2024. Therefore, the current $1,000 cap on catch-up contributions would rise annually to keep up with inflation.<\/p>\n

Support for Businesses Starting Employee-Sponsored Plans<\/h2>\n

SECURE Act 2.0 also ushered in changes to support companies that want to start an employee-sponsored retirement plan or encourage their employees\u2019 participation in an existing retirement plan. The legislation creates a \u201cStarter 401(k)\u201d plan that simplifies requirements a small company must meet to begin, while also providing tax incentives for starting a plan. Effective 2025, employees at companies starting a new retirement plan would be automatically enrolled in the plan, and then see their annual contribution amount increase automatically. Employees would have the option to opt out of plan enrollment.<\/p>\n

To encourage individuals with lower incomes to save more for their retirement, SECURE Act 2.0 enhances the Saver\u2019s Credit by converting it to a \u201cSaver\u2019s Match.\u201d The \u201cSaver\u2019s Match\u201d is where the federal government would match an individual\u2019s contributions, placing funds directly into his\/her retirement account.<\/p>\n

SECURE Act 2.0\u2019s Other Key Provisions<\/h2>\n

There are several other important provisions introduced in the SECURE Act 2.0 legislation.<\/p>\n

Beginning in 2024,<\/p>\n